27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Boeing Co (NYSE:BA) shares took a hit this week following reports that the grounded 737 Max won’t be cleared for flight by regulators until June or July. The new timeline is months later than the company had previously targeted.
The 737 Max has been grounded by regulators since March of 2019 due to safety concerns after 346 passengers died in two crashes.
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Several Wall Street analysts have weighed in on Boeing this week. Here’s a sampling of what they’ve had to say.
Timeline Still In Question
Bank of America analyst Ronald Epstein said even his conservative estimates for the 737 Max return date haven’t been conservative enough.
“Given the fact that new information has repeatedly arisen throughout this process, we would not be surprised to see [the return to service] date at some point extend beyond management’s current estimate,” Epstein wrote in a note.
Canaccord Genuity analyst Ken Herbert said new Boeing CEO Dave Calhoun is taking a much more proactive and cautious approach in communicating with regulators and investors.
“After the perception that BA has been too aggressive in its public pronouncements on the timing of the MAX return to service, we believe the communication today should provide a buffer concerning the time for regulators to satisfy their recertification requirements,” Herbert wrote.
Buying Opportunity?
Credit Suisse analyst Robert Spingarn said the eventual recertification of the 737 Max could be a tradeable event.
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“However, we continue to hold that we have no edge in predicting the timing of that event, while at the same time we see numerous risks that impact the long-term investment thesis and therefore our ability to become constructive,” Spingarn wrote.
Tigress Financial analyst Ivan Feinseth said the news essentially just pushed back the Boeing bull thesis by three or four months, and investors are getting paid a 2.6% dividend for their patience.
“I still believe the weakness is a buying opportunity and when the max returns to service we will see significant gains from current levels,” Feinseth wrote.
Ratings And Price Targets
- Bank of America has a Neutral rating and $360 target.
- Canaccord Genuity has a Hold rating and $350 target.
- Credit Suisse has a Neutral rating and $321 target.
Benzinga’s Take
As irritating as it is for Boeing investors that the 737 Max issues have dragged on this long, the plane should eventually get cleared and the company will eventually turn the corner. Boeing shares are down 15.9% in the past year while the broader market rallied, potentially creating a significant long-term value opportunity for patient investors.
Do you agree or disagree with these predictions? Email feedback@benzinga.com with your thoughts.
Related Links:
How 737 Max Delays Are Impacting General Electric
United Airlines Posts Strong Profits Despite MAX Headwinds
Photo by Steve Lynes via Wikimedia.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.